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New York-based Moody's Corporation (MCO) operates as an integrated risk assessment firm. With a market cap of $86.1 billion, the company provides credit ratings and related research, data and analytical tools, quantitative credit risk measures, risk scoring software, and credit portfolio management solutions and securities pricing software and valuation models. The credit rating giant is expected to announce its fiscal third-quarter earnings for 2024 on Wednesday, Oct. 23.
Ahead of the event, analysts expect MCO to report a profit of $2.63 per share on a diluted basis, up 8.2% from $2.43 per share in the year-ago quarter. The company beat the consensus estimates in three of the last four quarters while missing the forecast on another occasion.
For the full year, analysts expect MCO to report EPS of $11.43, up 15.5% from $9.90 in fiscal 2023. Its EPS is expected to rise 12.3% year over year to $12.84 in fiscal 2025.
MCO stock has outperformed the S&P 500’s ($SPX) 33.1% gains over the past 52 weeks, with shares up 48.7% during this period. Similarly, it outshined the S&P 500 Financials Sector SPDR’s (XLF) 37.2% gains over the same time frame.
Despite facing challenges in its rating business, MCO has continued to deliver strong performance, thanks to its thriving analytics business. Investors are optimistic about the company's future prospects, especially with the recent increase in issuance volumes pointing towards a positive outlook. With a solid economic moat, MCO is poised to capitalize on the growing demand for debt issuance and maintain its position as a key player in the capital markets. The recent interest rate cut by the Federal Reserve is expected to further boost MCO's performance, as seen by the uptick in issuance volumes.
On Sep. 23, MCO shares closed down more than 3% after Raymond James downgraded the stock to “Underperform” from “Market Perform.”
On Jul. 23, MCO shares closed up marginally after reporting its Q2 results. The company’s revenue increased 21.6% year over year to $1.8 billion. Its adjusted EPS came in at $3.28, up 42.6% year over year. MCO expects full-year adjusted EPS to be between $11 and $11.40.
Analysts’ consensus opinion on MCO stock is reasonably bullish, with a “Moderate Buy” rating overall. Out of 19 analysts covering the stock, eight advise a “Strong Buy” rating, one suggests a “Moderate Buy” rating, nine give a “Hold” rating, and one recommends a “Strong Sell.” MCO’s average analyst price target is $476, indicating a potential upside of 1.2% from the current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
